Management Cost Efficiency and Technology Gap: Cooperative vs. Non‐Cooperative Credit Banks

This paper analyses the difference between cooperative and non-cooperative banks in Italy in terms of managerial efficiency and technological inefficiency. We disen- tangle the metafrontier and group-specific frontiers using data from 1994 to 2015, decomposing the efficiency scores of the two bank groups into cost-efficiency scores and cost technology gap ratios. Cooperative banks have greater efficiency scores across all regions and for each group-specific technology frontier. The findings indi- cate that the primary cause of inefficiency for the two bank groups is not manage- ment inefficiency but rather the technology gap. Furthermore, cooperative banks exhibit lower cost efficiency inequality than non-cooperative banks in most regions.